Microsoft Announces Pricing for Office 365 Subscriptions

Microsoft on Monday unveiled a new Office 365 annual subscription model for small businesses and consumers buying the productivity suite.

Instead of buying a copy of Office once every four years or so for a single PC or Mac, people will be able to buy it once a year for five PCs or five Macs when Microsoft begins offering this subscription service. No details on availability were provided.

While buying Office every year may sound like a bad deal, Microsoft has structured this new subscription model with a few perks that may be appealing to some.

Subscription Perks and Pricing
Incentives under the subscription model include the ability to run Office on up to five PCs or Macs (or any combination of the two, according to a Microsoft spokesperson), increased Microsoft SkyDrive online storage and the assurance of having the most up-to-date Office software. In addition, users can change which devices are running Office at any time. "Office on demand" is available, too, which is a streaming service that lets subscribers temporarily run Office applications on nonlicensed machines. After the session is over, Office on demand wipes its bits from the machine.

The subscriptions aren't available yet, but Microsoft is offering a promotional deal in the meantime. Buyers of Office 2010 or Office for Mac 2011, starting on October 19, will be entitled to receive a free one-year Office 365 subscription. It's not clear from Microsoft's announcement when this offer will end.

Microsoft indicated that there will be an Office 365 Home Premium subscription for $99.99 a year. In addition, there will be an Office 365 Small Business Premium subscription for $149.99 a year. Not all of the Office 365 subscription offerings were disclosed. Microsoft plans to describe an Office 365 Enterprise subscription "in the coming months."

The old boxed model was simple enough because the Office copy was licensed to a single PC or Mac, and Microsoft plans to continue to sell Office 2013 in that way through retail outlets. A boxed copy of Office Home and Student 2013 will sell at retail price of about $139.99, when available. A boxed copy of Office Home and Business 2013 will cost about $219.99.

Retail outlets currently sell a Family Pack for Office for Mac 2011 that allows users the rights to put the Office suite on up to three computers. It's not clear if Microsoft's new subscription model will do away with this Family Pack offering in the near future, but it seems likely.

Microsoft's Office subscription model may appeal to households with multiple computers because of the five-machine install permissions. Small businesses also get the five-machine install privilege, but Microsoft's announcement states that "the new Office 365 for Small Business Premium is designed for organizations with 1-10 employees." It's not clear from Microsoft's announcement what will happen if an organization needs to scale up its Office 365 subscription licensing.

Subscription Differences
There are differences between the two subscription offerings described by Microsoft. Office 365 Home Premium comes with Access, Excel, OneNote, Outlook, PowerPoint, Publisher and Word. On the other hand, Office 365 Small Business Premium comes with those applications plus Lync. In each case, Access, OneNote and Publisher will only work on the PC side, not on the Mac side.

Storage options differ between the two subscription models. With Office 365 Home Premium, users get 20 GB of extra SkyDrive storage. On the Office 365 Small Business Premium side, Microsoft doesn't offer SkyDrive storage, but it does provide "10 GB of professional-grade cloud storage for the organization plus 500 MB per user." Office 365 Small Business Premium users also get 25 GB of Outlook mailbox storage.

Office 365 Small Business Premium subscribers will have the ability to use high-definition video conferencing for online meetings using the Lync client. Additionally, Microsoft is throwing in tools to build a public Web site with "no additional hosting fees." Details about what this public Web site constitutes weren't described.

One of the standout features between the two subscriptions concerns Microsoft's Skype voice-over-IP service. Office 365 Home Premium subscribers get Skype calling minutes. However, Microsoft's announcement added a caveat indicating that Skype is only available in some countries and that some numbers will be excluded from the free-minutes allowance. Office 365 Small Business Premium subscribers don't get Skype minutes at all.

Office 365 Small Business Premium subscribers get shared calendars, "professional" storage, high-definition videoconferencing and Web site creation. None of those features are available in the Office 365 Home Premium offering.

Those who will be buying a Windows RT tablet or PC in the near future will get Office Home and Student 2013 at no additional cost, Microsoft has indicated. Whether those users would pay for Office suite upgrades isn't yet described.